PP16795/03/2013(031743) Oct-16

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1 Tuesday, 17 October, 2017 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Research Team PP16795/03/2013(031743) Corporate News Economic News MyEG lands illegal foreign worker repatriation job AZRB lands second MRT2 job worth RM288.5m to build 3 elevated stations Bintai Kinden bags RM11m job to develop air traffic system Perisai gets Bursa nod to defer delisting Iris Corp appoints Shaiful Zahrin as CEO China 3Q GDP growth to slow on housing curbs, debt clampdown India palm oil imports climb for eighth month on festive demand Indonesia's central bank allows ringgit, baht in trade Slowing demand growth to push big oil from cars to chemicals Oil jumps on fears of new Iran sanctions, Iraq conflict Bursa Malaysia KLCI Performance Close Chg +/- Chg % YTD Chg (%) 1820 FBMKLCI 1, FBMEMAS 12, FBM100 12, FBMEMAS Shariah 12, FBM Hijrah Shariah 14, Volume (m) 3, Value (MYR m) 2, KLCI Year-End Target: 1,800 points Regional Indices Commodities (Last Close) Close Chg +/- Chg % YTD Chg (%) Close Chg +/- Chg % DJIA 22, Brent Crude (USD/bbl) NASDAQ 6, WTI Crude (USD/bbl) S&P 500 2, CPO (RM/MT) 2, FTSE 100 7, Gold (USD/ounce) 1, Nikkei , Latex (sen/kg) HSI 28, Soybean Oil SHCOMP 3, KOSPI 2, Forex TWSE 10, (per USD) BIMB (YE Forecast) Close Chg +/- Chg % STI 3, MYR JCI 5, JPY SET 1, EUR PSEi 8, SGD

2 Major Rates Daily Participation % Participation Bought Sold Net KLIBOR 3-mth 3.43 (%) (MYR m) (MYR m) (MYR m) KLIBOR 6-mth 3.56 Local Insti , , KLIBOR 12-mth 3.63 Local Retail yr MGS 3.58 Foreign yr MGS 3.89 Total , , Performance of BIMB Stock Coverage Top Gainers Source: Bank Negara Malaysia Top Losers Source: The Sun, BIMB Securities Research Close Chg +/- Chg % Close Chg +/- Chg % Top Glove % MCT % Petronas Dagangan % Kawan Food % Hartalega % Hap Seng Plantations % IOIProperties % Axiata % Kossan Rubber % GHL Systems % 2

3 CORPORATE NEWS MyEG lands illegal foreign worker repatriation job MyEG has been appointed by the Home Affairs Ministry to undertake the voluntary repatriation of illegal foreign workers for the Immigration Department. The tenure of the job, offered via a letter dated Oct 10, is valid for the period from Oct 10 to Dec 31. The project has no fixed value, as it is dependent on the number of foreign workers successfully repatriated the electronic services provider. Nonetheless, the board of directors is of the view that the project is in the best interest of the company and is expected to contribute positively to the earnings of the company for the financial year ending June 30, 2018.(Source: The Edge) AZRB lands second MRT2 job worth RM288.5m to build 3 elevated stations AZRB has secured an additional work package contract worth RM288.5m to construct 3 elevated stations and associated works for the upcoming 2 nd MRT 2 line: Serdang Raya (South), Seri Kembangan and UPM. Awarded by Mass Rapid Transit Corporation SB, the construction of the 3 elevated stations will take 48 months to complete and contribute progressively to its income from the FY2017 to FY2021. Following the latest MRT 2 job, its year-to-date contract wins have increased to RM502.5m, pushing the current unbilled orderbook to RM4bn, which will provide visibility to its earnings in the next 3 to 4 years. (Source: The Edge) Bintai Kinden bags RM11m job to develop air traffic system Bintai Kinden has won a sub-contract to develop an air traffic surveillance and management system at the KLIA for RM11m. Bintan s wholly-owned unit Bintai Kindenko SB received the offer from WZR Property SB to develop the Communication, Navigation, Surveillance/Air Traffic Management (CNS/ATM) System for the Kuala Lumpur Flight Information Region s New Traffic Control Centre at KLIA. The contract is non-renewable, with a fixed contract period. The sub-contract work is estimated to be completed by November Bintai Kinden s share price closed unchanged at 17.5 sen, with 1.02m shares traded, giving the group a market capitalisation of RM50.33m. (Source: The Edge). Perisai gets Bursa nod to defer delisting Practice Note 17 (PN17) company Perisai Petroleum Teknologi has received the green light from Bursa Securities to delay the suspension of its share trade and delisting. Bursa Securities has agreed to defer the delisting pending a decision on an application by the company. The application is subject to Bursa Securities' consideration and an announcement in relation to the outcome will be released in due course. Perisai s was seeking an extension of time to submit its regularisation plan, which was due by Oct 11. Perisai gained PN17 status last year after its wholly-owned subsidiary, Perisai Capital (L) Inc, defaulted in payment of the principal and interest on a S$125m bond. (Source: The Edge) Iris Corp appoints Shaiful Zahrin as CEO Iris announced a slew of boardroom changes today, together with the appointment of Shaiful Zahrin Subhan as its group CEO. He was previously the COO of the Malaysia Organising Committee (MASOC) under the Ministry of Youth and Sports to oversee all organisational aspects of the 29th SEA Games and 9th ASEAN Para Games hosted in Kuala Lumpur, on a 1 year secondment basis from MEASAT Broadcast Network Systems SB (Astro) from October 2016 to September In Astro, he was the Vice President, Customer Division where he led a number of key business units for their TV operations where he served for 5 years from Sept 2011 to Sept (Source: The Edge). 3

4 ECONOMIC NEWS China 3Q GDP growth to slow on housing curbs, debt clampdown China's economic growth is expected to ease to 6.8% in the 3 rd quarter from 6.9% in the previous quarter due to a cooling property sector and the government's battle against debt risks. Analysts' projected slowdown was at odds with central bank governor Zhou Xiaochuan's forecast suggesting an upside surprise as the economy could grow 7% in the 2 nd half of the year, versus 6.9% in the 1 st six months. The poll of 54 analysts, conducted before Zhou's forecast, showed a modest cooling in GDP growth but within Beijing's comfort zone, as President Xi Jinping is set to strengthen his grip on power at a Communist Party Congress this week. Zhou's forecast may have raised upside risks for his prediction of 6.8% growth for the 3 rd quarter, although he still expected a gradual cooling in the economy. (Source: Bloomberg) India palm oil imports climb for eighth month on festive demand Palm oil imports by India, the world s biggest buyer, climbed for an 8 th straight month in September as lower international prices prompted traders and refiners to buy more to meet festival demand. Imports advanced 20.4% to 931,637 metric tons in September from a year earlier. That compares with a median estimate of 925,000 tons in a Bloomberg survey. Total vegetable oil purchases, including sunflower oil and those for industrial use, rose 8.5% to 1.52m tons. P alm oil demand generally spikes during the festive period in India, the world s biggest importer, as Hindus celebrate major festivals such as Dussehra and Diwali between September and November. Vegetable oils are an important part of the festivities as consumption of sweets to fried foods increases. (Source: Bloomberg) Indonesia's central bank allows ringgit, baht in trade Indonesia's central bank it will allow transaction settlement for bilateral trade between Indonesia, Malaysia and Thailand to be conducted in local currencies. The new regulation is aimed at reducing dependency on the US dollar and limiting exposure to volatile foreign exchange rates. The rule, which goes into effect on Jan. 2 next year, allows Indonesian exporters or importers to settle payments with their Malaysian or Thai counterparts using rupiah, ringgit or baht. The 3 currencies are among the most volatile in the region. Bank Indonesia, Bank of Thailand and BNM, will select banks that will be able to carry out such transactions. (Source: Reuters) Slowing demand growth to push big oil from cars to chemicals Global oil demand growth will slow to a crawl and gasoline use will peak within the next decade, prompting the the world s biggest energy companies to accelerate the shift to natural gas and chemicals. Major crude producers will have to adapt to significant changes in the coming years, but their businesses can grow. Oil consumption will keep expanding until at least 2035 as the petrochemical industry, which provides the building blocks to manufacture everything from plastics to pesticides, makes up for the contraction in some transport fuels. There s also natural gas, used in power plants and increasingly trucks and ships. In a sign of the growing importance of this less carbon-intensive fuel, the Oil & Money conference, a gathering of hundreds of industry executives that celebrates its 38 th year on Tuesday in London, will open with a full day devoted exclusively to gas. (Source: Bloomberg) Oil jumps on fears of new Iran sanctions, Iraq conflict Oil markets concerns over potential renewed US sanctions against Iran as well as conflict in Iraq, while an explosion at a US oil rig and reduced exploration activity supported prices there. International Brent crude futures were at USD57.81 at 0556 GMT, up 64 US cents, or 1.1%, from the previous close. Prices were being pushed up by worries over renewed US sanctions against Iran. US President Donald Trump refused to certify that Tehran is complying with the accord even though international inspectors say it is. Under US law, the president must certify every 90 days that Iran is complying with the deal. Congress will now have 60 days to decide whether to reimpose economic sanctions on Tehran. (Source: Reuters) 4

5 ECONOMIC CALENDAR Date Time Country Event Period Survey Actual Prior Revised 10/17/ :00 IT Trade Balance EU Aug m -- 10/17/ :00 IT Trade Balance Total Aug m -- 10/17/ :30 US Import Price Index MoM Sep 0.60% % -- 10/17/ :30 US Import Price Index ex Petroleum MoM Sep 0.20% % -- 10/17/ :30 US Import Price Index YoY Sep 2.60% % -- 10/17/ :30 US Export Price Index MoM Sep 0.50% % -- 10/17/ :30 US Export Price Index YoY Sep % -- 10/17/ /22 IR Trade Balance Aug m -- 10/18/ :00 PD Sold Industrial Output MoM Sep 6.80% % -- 10/18/ :00 PD Sold Industrial Output YoY Sep 5.20% % -- 10/18/ :00 PD Construction Output YoY Sep 18.40% % -- 10/19/ :50 JN Trade Balance Sep 556.8b b 112.6b 10/19/ :50 JN Trade Balance Adjusted Sep 309.2b b -- 10/19/ :50 JN Exports YoY Sep 15.00% % -- 10/19/ :50 JN Imports YoY Sep 14.70% % -- 10/19/ :00 CH GDP YoY 3Q 6.80% % -- 10/19/ :00 CH GDP YTD YoY 3Q 6.80% % -- 10/19/ :00 CH Industrial Production YoY Sep 6.50% % -- 10/19/ :00 CH Industrial Production YTD YoY Sep 6.70% % -- 10/19/2017 CH FX Net Settlement - Clients CNY Sep b -- 10/20/ :00 EC ECB Current Account SA Aug b -- 10/20/ :00 EC Current Account NSA Aug b -- 10/20/ :00 IT Current Account Balance Aug m -- 10/20/ :00 SP Trade Balance Aug m -- 10/20/2017 PO Current Account Balance Aug m -- 10/23/ :00 LN Industrial Production YoY Sep % -- 10/23/ :00 PD Money Supply M3 MoM Sep 0.60% % -- 10/23/ :00 PD Money Supply M3 YoY Sep 5.50% % -- 10/23/2017 GR Current Account Balance Aug m -- 10/24/ :30 JN Nikkei Japan PMI Mfg Oct P /24/ :00 HU Central Bank Rate Decision Oct % % -- 10/24/ :00 HU Overnight Deposit Rate Oct % % -- 10/24/ :45 US Markit US Manufacturing PMI Oct P /24/ :45 US Markit US Services PMI Oct P /24/ :45 US Markit US Composite PMI Oct P /24/2017 RO Money Supply M3 YoY Sep % -- 10/24/ /28 GE Import Price Index MoM Sep % -- 10/24/ /28 GE Import Price Index YoY Sep % -- 10/25/ :00 IT Industrial Orders MoM Aug % -- 10/25/ :00 IT Industrial Orders NSA YoY Aug % -- 10/25/ :00 IT Industrial Sales MoM Aug % -- 10/25/ :00 IT Industrial Sales WDA YoY Aug % -- 10/25/ :30 UK GDP QoQ 3Q A % -- 10/25/ :30 UK GDP YoY 3Q A % -- 10/26/ :00 CH Swift Global Payments CNY Sep % -- 10/26/ :30 SW Trade Balance Sep b -- 10/26/ :30 SW Riksbank Interest Rate Oct % -- 10/26/ :00 EC M3 Money Supply YoY Sep % -- 10/26/ :45 EC ECB Main Refinancing Rate Oct % -- 10/26/ :45 EC ECB Marginal Lending Facility Oct %

6 DEFINITION OF RATINGS BIMB Securities uses the following rating system: STOCK RECOMMENDATION BUY Total return (price appreciation plus dividend yield) is expected to exceed 10 in the next 12 months. TRADING BUY Share price may exceed 15 over the next 3 months, however longer-term outlook remains uncertain. HOLD Share price may fall within the range of +/- 10 over the next 12 months TAKE PROFIT Target price has been attained. Fundamentals remain intact. Look to accumulate at lower levels. TRADING SELL Share price may fall by more than 15 in the next 3 months. SELL Share price may fall by more than 10 over the next 12 months. NOT RATED Stock is not within regular research coverage. SECTOR RECOMMENDATION OVERWEIGHT The Industry as defined by the analyst s coverage universe, is expected to outperform the relevant primary market index over the next 12 months NEUTRAL The Industry as defined by the analyst s coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months UNDERWEIGHT The Industry as defined by the analyst s coverage universe, is expected to underperform the relevant primary market index over the next 12 months Applicability of ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies. Disclaimer The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of BIMB Securities Sdn may from time to time have a position in or either the securities mentioned herein. Members of the BIMB and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgements as of this date and are subject to chg without notice. BIMB Securities Sdn accepts no liability for any direct, indirect or consequential loss arising from use of this report. Printed and published by BIMB SECURITIES SB ( X) A Participating Organisation of Bursa Malaysia Securities Level 32, Menara Multi Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, Kuala Lumpur Tel: Fax: Azharuddin Nordin Head of Research 6